Inflation

Two policymakers have suggested they might support a cut at the July meeting, but most others have signaled they want more time to assess the impact of tariffs on inflation.

The recent rally was driven by economic data that reinforced wagers on at least two rate cuts this year, as well as speculation President Donald Trump will name a more dovish successor to Jerome Powell.

The Federal Reserve's preferred measure of inflation moved further from its 2% target, underscoring the central bank's reluctance to cut rates.

Markets are currently wagering the US central bank will cut interest-rates once more with around a 70% chance of a second move this year.

Price growth continued to trend toward the Federal Reserve's 2% target, but not enough to spur action from the central bank.

Federal Reserve Gov. Michael Barr said global supply chain disruptions and inflation caused by tariffs could weigh heaviest on small businesses, especially those with little access to credit.

The slowdown reflected a decline in energy costs, used vehicles, and airfares. Motor vehicle insurance — a main source of inflation in recent years — also retreated.

The growing fears about the outlook for the global economy extended far beyond stocks. Oil tumbled on speculation demand will slow.

The central bank wants to let Trump's policies play out across the economy before deciding which way to move interest rates, and it's too soon to know what the impacts will be, the Federal Reserve chair said.

Notably in February, Americans reduced spending on services for the first time in three years in the face of higher prices — including on dining out.